The number of American workers employed in the manufacturing sector rose in June to 12,713,000, a 9 1/2-year high. That’s the largest number since December 2008, when manufacturing employment totaled 12,850,000 American workers.
“The monthly gain in manufacturing more than doubled the forecast,” Timothy Anderson, analyst at TJM Investments said. “The total number of people employed in manufacturing is the highest its been in 9 1/2 years.”
Manufacturing added a very solid 36,000 jobs, more than twice what economists had expected. But the month of June hasn’t been an anomaly and it warrants mentioning that Trump Administration policies cannot be separated from this resurgence.
Citing the Tax Cuts and Jobs Act (TCJA) — the president’s signature piece of legislation and the first overhaul to the U.S. tax code in 31 years — a record 95.1% of manufacturers this quarter registered a positive outlook for their company. That’s the highest level ever in the 20-year history of the Manufacturers’ Outlook Survey.
The National Association of Manufacturers (NAM) also said expectations for growth in investments, hiring and wages are reaching historic highs since the survey began in the fourth quarter (4Q) of 1997.
The first NAM Manufacturers’ Outlook Survey after President Donald Trump took office showed a “dramatic shift in sentiment.” The NAM survey found more than 93% of manufacturers feeling positive about their economic outlook, which at the time was the highest level ever measured.
From the panel responses, it’s clear that sentiment was fueled by an administration focused on rebuilding the American manufacturing base.
In June 1998, there were 17,608,000 American workers employed in the manufacturing industry, something Mr. Trump made the centerpiece of his campaign and MAGAnomics. The previous administration took the position that most of these jobs were destined never to come back, and Barack Obama mocked the then-Republican candidate for needing a “magic wand” to rebuild the manufacturing base.
Now, numerous regional surveys of manufacturing activity have also broken records, and though manufacturers remain concerned over President Trump imposing tariffs on trade cheaters to force reciprocity, there’s also evidence that the economic agenda is working.
The U.S. trade deficit again narrowed sharply in May, shrinking $3.0 billion from $46.1 to $43.1 billion, a big net-positive for 2Q gross domestic product (GDP). This is the most narrow reading for the trade gap in 19 months.
In April, the U.S. trade deficit also narrowed sharply to $46.2 billion in April, another big net-positive for 2Q GDP.
“I agree with him [Trump] completely,” Mark Mobius, the famed investor and founder of Mobius Capital Partners LLP, recently said in an interview. “Winning means getting some concessions and a reduction in the trade deficit.”
Other goods-producing industries have either improved dramatically or completely reversed their negative trends.
Construction employment continued the upward trend in June (+13,000) and has increased by 282,000 over the year. There are now 7,222,000 American workers employed in construction, the most since April 2008 when there were 7,327,000 workers in the industry.
The mining sector has shown the most dramatic turnout, evolving from an industry that was almost extinct to one that appears to be thriving. Employment in mining continued on an upward trend in June (+5,000). The industry has added 95,000 jobs since its low point in October 2016.
The U.S. economy added 213,000 jobs in June and the civilian labor force grew by 601,000, pushing the unemployment rate up 0.2% to 4.0%. Further, the unemployment rate for Hispanic Americans fell to the lowest ever recorded, 4.6%.
The labor force participation rate also rose by 0.2 percentage points to 62.9.
“Six-hundred thousand people re-entering the workforce is very positive,” Mr. Anderson added. “It shows that people who had previously ‘stopped looking’ have been paying attention to the stories of how tight the job market is and that there are more job openings than people unemployed.”
The Bureau of Labor Statistics (BLS) said the number of job openings in the U.S. reached a new record high of 6.7 million on the last business day of April. When the Labor Department (DOL) began tracking job openings in December 2000, the number of unemployed persons per job opening was a seasonally-adjusted 2.6%.
It’s now just 0.9%, an all-time low.
“The June jobs report shows these people have confidence in finding a job,” Mr. Anderson noted, adding the findings were “very consistent with recent surveys showing sharply increasing optimism among those in the lower income bracket.”